Steps taken by Indian government to curb iron ore exports

Tuesday, 16 Aug 2011

India's iron ore exports, which fell for the first time in a decade last year, could halve over the next five years as the country feeds the expansion of its steel industry.

Following is a timeline of key developments in India's iron ore sector since Karnataka, the country's second-largest producer, introduced its shipments ban:

July 26th 2010
Karnataka, ruled by the opposition Bharatiya Janata Party, bans shipments of iron ore. The state government had faced pressure from the ruling Congress led central government to clamp down on illegal mining. Exporters in the state subsequently challenged the ban.

September
Iron ore exports post their sharpest monthly fall in nearly two years after Karnataka's ban and slow China demand. Exports drop 47% from a year earlier to 3.03 million tonnes.

November 19
Karnataka's high court upholds the ban on exports.

November 23
Iron ore miners in the state say they will challenge the ban in the Supreme Court.

January 11th 2011
Top iron ore producing Orissa says it is considering seeking a ban on exports of the key raw material.

January 20
The Supreme Court delays its decision on the ban to mid February.

January 25
Indian railways announce an increase in freight costs on iron ore for export by 50% to INR 1,500 per tonne.

January 29
India's Multi Commodity Exchange and Indian Commodity Exchange launch the world's first iron ore futures contracts. But a ban on foreign players means liquidity is low.

February 10
Steel Authority of India wins environmental approval for its own iron ore mines in Jharkhand. SAIL says it will be operating in three years and will be key to its future iron ore supply.

February 11
The Supreme Court again adjourns its hearing on the Karnataka ban, this time to April 4.

February 18
Chhattisgarh joins Orissa in seeking central government approval to ban iron ore exports.

February 28
India hikes export duty on iron ore to 20% from 5% for fines and from 15 percent for lumps in its annual budget.

March 3
Freight rates are hiked again, this time by 100 rupees per tonne to INR 1,600.

March 30
Indian Railways says it will impose a "busy season" charge of 7 percent on iron ore freight rates from April 1 to June 30 and from Oct. 1 to March 31. The charge will equate to about INR 150 to INR 200 per tonne, one trader says.

April 5
Supreme Court orders Karnataka state to lift ban on iron ore shipments from April 20.

June 27
Iron ore exporter Mineral Enterprises Ltd says to call on Supreme Court to uphold lifting of the Karnataka ban which has been delayed by an inquiry into illegal mining.

July 27
An independent led inquiry implicates BS Yediyurappa chief minister of Karnataka, in a USD 3.6 billion illegal iron ore mining scandal.

July 29
Supreme Court imposes an interim ban on mining in the district of Bellary, a key iron-ore rich region in Karnataka, on concerns of environment degradation.

July 31
Yediyurappa resigns as Karnataka chief minister.

August 5
Supreme Court partially lifts iron ore mining ban in Bellary district, allowing state run NMDC to mine up to 1 million tonnes a month from Aug. 6.

(Sourced from Reuters)